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Time to Move On

Last year was a chaotic, stressful year for the tobacco industry and convenience store retailers. The federal government imposed a hike in the federal excise tax on tobacco products to cover an expansion of the State Children's Health Insurance Program (SCHIP), and passed legislation empowering the Food and Drug Administration (FDA) to regulate tobacco products and ban flavored cigarettes, rolling papers, filters and loose tobacco for cigarettes.

The good news is that was last year. As hard as the trials and tribulations of 2009 are to forget, they are in the past now. But don't forget the lessons and opportunities of 2009, such as the increased focus on inventory and the cleansing of slow sellers from the shelves, as well as the need to become active on tobacco regulatory issues.

That being said, for 2010, retailers should focus on state level legislation -- particularly the ones that slipped under the door in 2009, such as state excise tax (SET) increases.

As state deficits widen, lawmakers are again turning to SET increases on cigarettes and tobacco products in a flawed attempt to plug a gaping sinkhole with what equates to a wine cork, which only throws gasoline on the blazing fire of counterfeit and untaxed cigarette sales in many cases.

Use the resources provided by the major tobacco companies, national and state associations, because they can definitely use help from convenience store retailers in their efforts. And make time to reach out and personally contact local legislators to express your views. Face-to-face contact can go a long way, but a phone call or e-mail to your representatives can also be effective.

It should be the responsibility of each and every convenience store company to fight the anti-tobacco laws currently proposed in its state. It should also be the job of every convenience store in the nation to keep on top of these issues and nip them in the bud before lawmakers can take the well-trod easy route and pass increases on so-called "sin taxes," rather than take a hard look at their budgets and constituents to determine a solid way out of the financial mess they find themselves in.

And remember, "sin taxes" don't just apply to tobacco products and alcohol beverages anymore. While convenience stores can celebrate the defeat of a cigarette tax increase in their state, legislators are increasingly looking at candy and sugar-sweetened soft drinks as a way to plug budget holes in the same way as tobacco tax increases.

Of course, there is a slim chance that 2010 will be as historic a year for tobacco laws as 2009 was, but anything is possible in the current economy.
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